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Scotch whisky brings in £5.5 billion to economy, new report finds

The direct impact of the spirit is estimated to be £3.8 billion, with additional indirect and induced effects at a further £1.7bn.

Investment in the industry has been credited for some of the growth (Andrew Milligan/PA)
Investment in the industry has been credited for some of the growth (Andrew Milligan/PA)

The Scotch whisky sector’s contribution to the UK economy has grown by 10% since 2016, according to an industry body.

Investment and increased export success resulted in the spirit bringing in £5.5 billion in 2018, up from £5 billion two years earlier.

A new report by the Scotch Whisky Association (SWA), building on research carried out by the Centre for Economic and Business Research (CEBR), also reveals the drink generates two-thirds of all spirits gross value added (GVA) in the UK.

We will continue to press the Chancellor for fairer treatment for Scotch whisky in our domestic market Karen Betts

Karen Betts, chief executive of the SWA, said: “Despite the challenges of Brexit, this investment continues to flow, with further projects planned and more distilleries set to open – a sign that the Scotch Whisky industry remains confident about the future.

“This is great news for our many employees, our investors, our supply chain and, of course, for consumers all over the world who love Scotch.

“This report also highlights the high rate of domestic tax that Scotch Whisky faces in the UK.

“In the US, Scotch and other whiskies are taxed at just 27% of the rate that HM Treasury taxes us here at home.

“We will continue to press the Chancellor for fairer treatment for Scotch whisky in our domestic market, which reflects the vital economic contribution the industry makes to the UK economy every day.”

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Fergus Ewing said Scotch is one of Scotland’s greatest exports (Andrew Milligan/PA)

The direct impact of the spirit in the economy is estimated to be £3.8 billion, with additional indirect and induced effects of a further £1.7 billion.

Scotch whisky  contributed 21% to the value of all UK food and drink exports and 1.3% of the value of all UK goods exported in 2018.

The industry has been buoyed in recent years by record exports, reaching £4.7 billion in 2018, and several new distilleries beginning production and opening their doors to tourists.

Exchequer Secretary to the Treasury Robert Jenrick MP said: “I’m delighted to see how this important sector is thriving.

“We are supporting the Scotch whisky success story by freezing duty on spirits again this year.

“Our record of reductions and freezes to alcohol duties have provided more than £4bn of support to the drinks sector here in the UK.”

Scotland’s Rural Economy Secretary Fergus Ewing said: “I welcome the contribution that the Scotch whisky industry makes to the Scottish economy.

“The industry’s performance is testament to the hard work of those who work in this important sector, making Scotch whisky one of Scotland’s greatest global exports.”

PA

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